Performance Management

 

PERFORMANCE MANAGEMENT

 

Basic Concepts in Performance Management and Appraisal  Comparing Performance Appraisal and Performance Management

Performance Appraisal:

Setting work standards, assessing performance, and providing feedback to employees to motivate, motiv ate, correct, and continue their performance.

Performance Management: An integrated approach to ensuring that an employee’ employee’s s performance supports and contributes to the organization’s strategic aims.

 

Buiding blocks of PM system Direction sharing

Role clarification

Goal alignment

Goal setting and planning 

Developmental goal setting 

Ongoing performance monitoring 

Ongoing feedback 

Coaching and support 

Performance assessment (appraisal)  Rewards, recognition, and compensation  Workflow,, process control, and return on investment management  Workflow

 

Difference Appraisal

Management

Primary focus

Assessing performance and potential for performance

Improve employee performance & development

 Activities involved

Designing appraisal programme Build employee database

Set of HR activities designed and executed to assess and improve performance

Leadership

Directional, evaluative

Facilitative, coaching

Frequency

Yearly, early, six monthly

Often, can be ongoing

Degree of formality

High

Low

 

Need for Performance Appraisal Why Appraise Performance?  1

Is basis for pay and promotion decisions.

2

Plays an integral role in performance management.

3

Helps in correcting deficiencies and reinforcing good performance.

4

Is useful in career planning.

Administrative, Development, Organisational objectives, Documentation purposes

 

 Appraising Performance Performance  Steps in Appraising Performance  Objectives of Performance Appraisal Appraisal Establish job expectations/standards

1 2

Design appraisal programme (formal Vs.Informal, who are the raters, what to evaluate, methods to use)

3

4

 Appraise performance performance

5

Performance Interview

6

 Archive Appraisal data 7

Using appraisal data for appropriate purpose

 

Defining the Employee’s Goals and Work Standards  Guidelines for Effective Goal Setting

Assign Specific Goals

Assign Measurable Goals

Assign Challenging but Doable Goals

SMART Goals

Encourage Participation

 

What to Measure?   – Work output (quality and quantity)  – Personal competencies  – Goal (objective) achievement  – Timeliness  – Cost effectiveness  – Need for supervision  – Interpersonal impact  – Community service

 

Who Should Do the Appraising?  Immediate Supervisor

Peers

Rating Committee

Self-Rating

Potential Appraisers

Subordinates

360-Degree Feedback

 

Performance Appraisal Methods  Appraisal Methodologies  1

Graphic Rating Scale Method

6

 Assessment Centre Centre

2

 Alternation Ranking Method

8

Behaviorally Anchored Anchored Rating Scales (BARS)

3

Paired Comparison Method

9

Management by Objectives (MBO)

4

Forced Distribution Method

910

5

Critical Incident Method

6

Essay Method or Narrative Forms

11 12

360 degree feedback Checklist Appraisal  Annual Confidential Report (ACR)

 

Graphic Rating Scale

Easy to understand but subjectivity high

 

Paired Comparison Method

Used to identify the best candidate for a promotion or special assignment but demotivates others

Note: +  means “better than.” –  Note: +  – means “worse than.” For each chart, add up the ’s in each column to get the highest-ranked employee. number of + ’s

 

Critical Incident Method Supervisor keeps a written record of incidents (including dates, people involved, actions taken) that show positive and negative ways an employee has acted. At the time of  the appraisal, supervisor reviews the record to evaluate an employee’s behavior. During the appraisal interview, a supervisor gives employee a chance to offer his views of  each incident recorded.

Advantages & Disadvantages: Time consuming & important incidents could be overlooked Supervisors tend to record negative events more than positive ones 

 

Contd….Critical Incident Method  Continuing Continui ng Duties

Targets

Critical Incidents

Schedule production for plant

90% utilization of  personnel and machinery in plant; orders delivered on time

Instituted new production scheduling system; decreased late orders by 10% last month; increased machine utilization in plant by 20% last month

Supervise procurement of raw materials and inventory control

Minimize inventory costs while keeping adequate supplies on hand

Let inventory storage costs rise 15% last month; overordered parts “A” and “B” by 20%; underordered part “C” by 30%

Supervise machinery maintenance

No shutdowns due to faulty machinery

Instituted new preventative maintenance system for plant; prevented a machine breakdown by discovering faulty part

 

 Assessment Centre  Central location where employee come together to participate in job-related exercises evaluated by trained observers.   Assessed : 

  Assertivene  Assertiveness ss 

Persuasive ability



Communicating ability



Planning and organisational ability



Self-confidence



Resistance to stress



Decision making

 

 Assessment Centre    Activitie  Activities s



include :



In-basket training



Computer simulation simulations s



Role playing



Work groups without leaders

Companies using : 

Modi Zeroz



Crompton Greaves



Ranbaxy



Tata

 

Behaviorally Anchored Rating Scale (BARS)  Developing a BARS

 Advantages of BARS

1. Gen Genera erate te critic critical al incidents 2. Dev Develo elop p pe perfo rforma rmance nce dimensions

 – Less subjective and overcome rater  errors  – Clearer standards

 – Feedback 3. Rea Reallo llocat cate e inci inciden dents ts 4. Sca Scale le tthe he iinci nciden dents ts Disadvantages 5. De Deve velo lop p a fi fina nall • Expensive instrument

• Time consuming

 

Title

 

Management by Objectives (MBO)  • Goal directed approach in which workers and supervisors set goals together for the upcoming evaluation period and also measure the extent to which goals have been met. • Steps involved: 1. Setting of organization’s goals. 2. Sett Settin ing g of of dep depar artm tmen enta tall goal goals. s. 3. Disc Discus ussi sion on of of de depa part rtme ment ntal al goal goals. s. 4. Defining Defining expected expected results results (setting (setting individu individual al goal goals). s).

5. Condu Conducti cting ng period periodic ic perf perform ormanc ance e re revie views. ws. 6. Prov Provid idin ing g perf perfor orma manc nce e feed feedba back ck.

Advantages: Employee knows what is expected and a supervisor focuses on results rather than more subjective criteria

 

Problems with MBO Setting unclear objectives 

Time-consuming appraisal process

Problems with MBO

Conflict with subordinates over objectives

 

Checklist Appraisal  Contains series of questions about an employee’s performance.  A superviso supervisorr answers yes or no to the questions. questions. There is a key for scoring the items on the checklist; checklist; the score results in a rating of an employee’s performance.  performance.  

Advantages & Disadvantages: Easy to complete but difficult to prepare. Each job requires a different set of questions.

 

360 Degree Feedback  Multiple raters or stakeholde stakeholders rs are involved in evaluating performance about ’how an employee does the job’– ’–   immediate supervisors, team members, customers, peers, self 

Advantages & Disadvantages: Employee can compare himself with other’s perception about him Skills like interpersonal skills, team skills can be identified. Drawback : Difficult to select rater, designing questionnaire and analysing data Rater may have a fear to assess employee

 

Contd….Checklist Appraisal  Contd….Checklist

 

 Appraising Performance: Problems 

Appraisal Problems

Personal Bias Unclear Standards

Halo Effect

Severity error

onrace, the basis age, of gender

Restriction range errorof

Central Tendency

Leniency

error

error

 

 Appraising Performance: Solutions  How to Avoid Appraisal Problems

Know Problems

Use the Right Tool

Train Supervisors

Control Outside Influences

Keep a Diary

 

  THANKS